Investment is a convenient path to obtaining a residence permit and moving to the European Union. It comes with perks like faster processing times and family inclusion. For those considering an EU residence by investment program, here’s a checklist by Albert Ioffe, Legal and Compliance Officer at Immigrant Invest.
1. Difference between EU residency by investment and citizenship by investment
There are several programs for immigration by investment in the EU, but none provide a direct path to citizenship. These programs are usually called “Residence by Investment” or “Permanent Residence by Investment”. After obtaining the status, investors can eventually acquire full EU citizenship.
Key benefits of immigration by investment in the EU:
- freedom to move to European Union, live, work, and travel within the member states;
- access to leading educational institutions;
- availability of top-tier healthcare systems;
- potential to do business within a large and dynamic market, in Europe and internationally;
- optimization of taxes;
- access to international banking systems;
- life in a secure and stable environment.
2. Halted and relaunched EU residency programs
Due to strict regulatory requirements for compliance and anti-corruption measures, some European countries have recently revised their investment programs.
Changes to the EU residence by investment programs:
- Under the Portugal Golden Visa program, the real estate option was discontinued. Now the minimum investment is €250,000 in arts and cultural heritage support.
- Under the Hungary residence permit by investment program, the government bond option was discontinued several years ago. Now the program has been relaunched, and the minimum investment starts at €250,000 in real estate fund units.
- Under the Greece Golden Visa program, the real estate option was €250,000+ across all regions. Now the investment in high-demand area real estate starts at €500,000.
- The Spain Golden Visa Program is set to end. However, investors can still apply before September 4th, 2024.
3. Eligibility for EU residence permits
Eligibility for a EU Residence by Investment programs differs by country, but there are common requirements, including:
- non-EU citizenship, meaning that applicants must not be a citizen of an EU member state;
- clean criminal record, with proof from all countries where applicants have resided;
- financial means to make the required investment;
- legal origin of the investment funds, with proof and verification;
- valid health insurance, adequate for the host country of investment;
- commitment to investment, such as willingness to maintain the program requirements for a specified period, usually around 5 years.
4. Investment requirements
An investment program usually has several options. They vary by country, but some types are common.
Real estate. Investors can buy residential or commercial property in the country. This option offers a tangible asset that grows in value and may provide rental income.
Business. Investors can support an existing business or establish or relocate their own. This often requires creating a certain number of jobs.
Government bonds. A low-risk investment with fixed returns.
Donation. A non-refundable contribution to social and economic development projects in the country. The minimum requirement is usually comparatively low.
5. Family Inclusion
Investment programs typically allow the inclusion of family members. Most include spouses and children under 18. Some programs allow registered partners.
Additional family members, if allowed, usually must be financially dependent on the investor and/or their spouse. This includes parents, grandparents, children over 18, and siblings.
6. Tax residency and optimisation
After immigrating to the EU, investors must usually spend 183 days in the country to be considered tax residents. They also become eligible for certain tax benefits, for example:
- in Hungary, tax rates are among the lowest in Europe, with a 15% income tax and 9% corporate tax;
- in Italy and Greece, new residents can pay a lump sum of €100,000 per year on foreign income;
- in Cyprus, there’s a 12.5% corporate tax—one of the lowest in Europe—with no tax on global income or inheritance.
7. Most popular EU Residence by Investment programs
- minimum investment: €250,000 in real estate fund units;
- citizenship path: after 8 years of permanent residency;
- family inclusion: spouse, children under 18, and dependent parents.
Portugal Golden Visa
- minimum investment: €250,000 in art and heritage support;
- citizenship path: after 5 years of residency;
- family inclusion: spouse, dependent children under 26, and parents.
Italy Golden Visa
- minimum investment: €250,000 in an innovative startup;
- citizenship path: after 10 years of residency;
- family inclusion: spouse, dependent children, and parents.
Greece Golden Visa
- minimum investment: €250,000 in real estate;
- citizenship path: after 7 years of residency;
- family inclusion: spouse, dependent children of the investor under 24, dependent children of the spouse under 21, and parents.
Cyprus Golden Visa
- minimum investment: €300,000 in real estate;
- citizenship path: after 5 years of residency;
- family inclusion: spouse or partner, dependent children under 25, and dependent children of any age.
8. Application process
The general steps involved in applying for these programs are:
- Selection of investment. Choose the investment option based on the country’s requirements.
- Application submission. Prepare and submit the necessary documentation.
- Investment execution. Make the required investment.
- Residency permit issuance. Receive the residency permit.
- Citizenship application. Apply for citizenship after fulfilling residency requirements.
9. Additional expenses
Additional expenses beyond the investment include government fees, issuance fees, transfer taxes, due diligence costs, and legal or administrative fees. These can vary widely depending on the country and the complexity of the application.
Common additional expenses:
- government fees; €5,000 to €10,000 per applicant;
- issuance fees; varies by country;
- transfer tax; 6% to 8% of property value, with some countries applying higher rates;
- due diligence fees; €5,000 to €15,000, depending on the program and profile;
- legal/administrative fees; typically €10,000 to €30,000 depending on complexity.
In a nutshell
- Residency vs. citizenship. EU programs offer residency by investment, with citizenship as a long-term option. Consider Hungary, Portugal, Cyprus, Italy, and Greece, each with different investment minimums and timelines.
- Investment options. Real estate, business, or government bonds are common choices.
- Eligibility. Non-EU citizenship, clean criminal record, and proof of funds required.
- Family inclusion. Most programs allow spouses and dependent children.
- Tax residency. Spending 183 days in a EU country usually establishes tax residency.
- Program changes. Some programs, like Spain Golden Visa, end soon; stay updated.
- Application process. Involves investment selection, application submission, investment execution, and residency permit issuance.
- Additional costs. Factor in government fees, transfer taxes, and legal expenses.
